DOE allows power firms to conduct GIS

THE Department of Energy (DOE) has granted approval to two more firms to conduct their grid impact study (GIS) on their planned power projects.

Excellent Energy Resources, Inc., which, according to the DOE, is affiliated with the power unit of conglomerate San Miguel Corp. (SMC), is pursuing a power project in Batangas City.  Sunwest Water and Electric Co. was also given the green light for 50MW Daraga Ancillary Reserve Diesel Power Plant, 100MW Kiwalo Diesel Power Plant and 50MW Namantao Diesel Power Plant.

Based on the agency’s latest list for August, Excellent Energy secured its clearance for a GIS for the “1,200megawatt (MW) Ilijan natural gas fired plant project” last August 27. Sunwest, meanwhile, secured its permit on August 20 and 26.

“Excellent Energy Resources, Inc. is affiliated with SMC. We just find it difficult to establish investment partnership,” said DOE Electric Power Industry Management Bureau Director Mario Marasigan.

The list did not include the details of the planned power project.

Prior to construction, a power firm must secure the go-ahead of the DOE for it to conduct a GIS. This is necessary in determining if the electricity to be generated by the power project can be absorbed by the country’s transmission system.

SMC Global Power earlier said it is expanding the 1,200-MW Ilijan combined cycle power plant in Batangas province by another 850 MW.  This is expected to start commercial operations by 2023.

SMC Global shortlisted six EPC (engineering, procurement and construction) contractors for the Ilijan power plant expansion. These are Siemens, MHPS, Formosa Heavy Industries, B&V, POSCO Engineering & Construction Co. Ltd. and Dailem.

Moreover, the company will also construct a liquefied natural gas (LNG) terminal alongside the Ilijan plant. It was already in talks with AG&P for the construction.

“As of August 2020, the company is in advanced stages of executing a binding term sheet on the terminal use agreement with AG&P to provide LNG receiving, storage and regasification services to the Ilijan power plant and the Ilijan expansion,” SMC Global said.

The LNG terminal is expected to be commercially operational by June 2022, in time for the expiration of the Ilijan Independent Power Producer Administrator (IPPA) contract.  Upon expiration of the Ilijan IPPA with the government, SMC Global subsidiary South Premiere Power Corp. will become the legal owner and operator of the Ilijan power plant.

An IPPA has the right to sell electricity generated by the power plants owned and operated by the relevant IPPs without having to bear any of the large upfront capital expenditures for power plant construction or maintenance. The IPPA also has the ability to manage both market and price risks by entering into bilateral contracts with offtakers while capturing potential upside from the sale of excess capacity through the wholesale electricity spot market.


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